China Unicom is in talks to carry the iPhone, say Chinese publications. China Business News says it has received confirmation from a manager, and also learned that negotiations are being led by board chairman Chang Xiaobing. A source within the company claims that talks have actually been off and on with Apple since October, but are being held up by several obstacles, including business and legal issues.

Wi-Fi, for instance, is said to be illegal on Chinese cellphones, which may force Apple to cripple its device, or the Chinese government to revise statutes. Apple and Unicom are meanwhile said to disagree on which applications will be pre-installed, as the latter wants software familiar to the country, while Apple is holding to its traditional stable. Apple may also be continuing to push for revenue sharing, despite a switch to carrier-subsidized pricing elsewhere.

Unicom maintains an advantage in being the only Chinese carrier planning a WCDMA network, however, which will launch May 17th and allow devices like the iPhone to receive 3G broadband. It is further accustomed to targeting high-end shoppers, and it is the only alternative to China Mobile, which is said to be pushing for the revenue and control in a local App Store. The App Store has proven lucrative for Apple, and the company typically refuses to cede control of businesses to third parties.